“It was the best of times, it was the worst of times”, wrote Charles Dickens as the opening line of his novel of the French revolution, A Tale of Two Cities. Written by one of the most famous journalists of his age, this paradox could well be applied to the plight of the modern media industry, which is currently in the throes of its own cultural revolution.

Yet the story is fast becoming a tale of two industries: as newspaper circulations decline, online news continues to flourish. Despite the contracting economy, UK online publishers have predicted a 16 per cent growth in digital revenues this year as readers abandon paper for free online sources.

News is going digital and it is hitting traditional media organisations hard. But for regional news outlets, which have felt the worst of the media downturn – a study release last month by Princeton university found that only 15 US cities have competing local papers compare to 689 a century ago – web 2.0 is offering a glimmer of hope for the future.

Linda Preston, creator of local news site Darwenreporter.com, believes that the wealth of information created by web 2.0 means that many beleaguered journalists unable to find work are starting their own local websites to fill the vacuum left by the decline in local papers.

She says: “The public still wants someone who can reach out to them on a local level who has an intimate knowledge of the area. Someone still has to hold corrupt officials to account.

“I’ve found that many journalists facing redundancy are considering following my example and using their skills and long experience to work their own postcode.”

Even for local papers struggling to survive, the web if offering new possibilities. Elaine Helm, new media editor at the Herald in Everett, Washington state, believes that the power of social media is creating a new golden age for online local news outlets. She says:

“For individual and small groups of journalists, there hasn’t been a better time to be doing what we’re doing and getting it out there.”

During the latest “hundred-year storms to hit Washington state, Helm used social networking to keep local residents informed of the latest developments. She sent out a tweet asking people to use a common hashtag – a metadata naming convention – for all information relating to the storm: #waflood.

Within minutes, a network of journalists from the area were all using the common tag and soon other contributors from the region were joining in. The information was then picked up by federal and state agencies and soon a mass co-ordination of effort by the state, journalists and locals was providing real-time information on the floods.

For Helm, the wealth of information instantly available on the internet means journalists must stop seeing themselves as the gatekeepers of knowledge, but rather the curators. “There’s a role to play for journalists in sorting through all the stuff that’s out there,” she says.

“I’ve heard people talk about finding the patterns in the noise. We’re more about looking for and tagging the most relevant and original reporting and trying to bring it to our audiences.”

But relying on citizen journalists has its own pitfalls. Last year the Huffington Post, one of the largest digital media current affairs sites in the world, caused a stir by launching OffTheBus, a project which used 12,000 citizen journalists to cover the US presidential election race.

It was hailed as a resounding success. Mayhill Fowler, a 61-year-old failed novelist with no journalism training, broke two of the most memorable stories of the election: Barack Obama’s “guns and religion” blunder and Bill Clinton’s fuming at a public rally.

However, the coverage also brought into question the viability and integrity of relying on citizen journalists. Barack Obama’s comments were officially made off-record and while for a citizen journalist they are fair game, for a professional breaking confidentiality could potentially undermine journalistic integrity.

It is the lines of integrity and accountability that will mark out journalists from citizens in media 2.0. “For anyone who wants to be part of the journalism world then having people trust them is the most important thing”, says Dan Gillmor, author of We the Media and fellow at the Berkman Center for Internet & Society at Harvard University.

Gillmor believes that the advent of web 2.0 will not replace the work of traditional journalists but rather make them more accountable. He says: “I don’t think citizen journalists are going to take the place of professionals. They will do things that traditional journalists have never done but we can’t replace the good things that they have done.”